Contrarian Play WNC>

Discussion in 'Stocks' started by stonedinvestor, Feb 23, 2007.

  1. Wabash National (NYSE: WNC) reported a $5 million quarterly loss amid a challenging industry environment.

    While revenues for Wabash rose nearly 4% in the fourth quarter, the company's net earnings came in at a $5 million loss, compared with a $20 million net profit last year. It suffered from rising commodity prices in oil, steel, and rubber, along with a weak freight environment.

    New air quality regulations went into effect that were more stringent than in the past. Those tougher emissions rules caused the price of trucks to rise markedly. As a result, customers tried to beat their implementation by putting their orders for fleets in last year. While trucks will need to be replaced at some point, that purchase bubble will lead to slower sales, at least in the first half of the new year.

    Truck orders are expected to rebound in the second half of 2007. Infometrics predicts that after an 11% decrease by the end of the first quarter, sales will start rising, and by the end of 2008 they should have risen by 12% or more.

    The American Trucking Association expects total tonnage for all trucking as a percentage of the total freight pool to rise to 69.2% by 2011 and to 69.5% by 2017 from 68.9% in 2005. Trucking's share of total revenue is projected to reach 85.1% by 2017, up from 84.3% last year.

    Those are heartening numbers for Wabash, even though they do little to assuage the pain of the latest earnings report. Quote and order activity were weaker than in previous periods, and a backlog of $512 million was actually less than a year ago.

    There is no reason to like this stock right?
    Why would an insider a few days ago do this>
    INSIDER TRANSACTIONS REPORTED -

    14-Feb-07 GENDELL JEFFREY L ET AL
    Beneficial Owner (10% or more) 207,600 Indirect Purchase at $16.08 per share. $3,338,207
    13-Feb-07 GENDELL JEFFREY L ET AL
    Beneficial Owner (10% or more) 400,000 Indirect Purchase at $16.13 per share. $6,452,000

    Yea let's just throw $9 million down the drain. It just doesn't make sense. Let's check the chart- oh my it looks damn good. This looks like it's back to $20 but why? I have no idea it's a contrarian play but we must make ourselves buy some stocks we wouldn't normally buy sometimes. So for me the significant insider commitment ( one which i hope Barrons picks up this weekend) is enough for me to take a stab at WNC.